After a long dry spell, Sonoma County builders last year created the largest number of new single-family homes in almost a decade.
In 2016, county and city governments issued permits for 581 single-family homes, according to the California Homebuilding Foundation in Sacramento. The last time more homes were built here was in 2007, when 904 permits were issued. Last year’s permit total was 236.
The construction industry remains a major employer and a significant contributor to the county economy in that way. In recent years, business and civic leaders have also looked to builders to help address a housing shortage they say is so dire it threatens to become a drag on the economic health of the region.
From that perspective, builders and others said the current level of construction activity remains well below average. And there are few reasons to expect it to increase dramatically anytime soon.
“There’s still headwinds out there for private builders and developers,” said Keith Christopherson, a longtime builder and a partner in Synergy Communities by Christopherson of Santa Rosa. For many, capital and suitable land remain in relative short supply, and most are wary of the possibility they could face another economic downturn with unsold units.
The foundation’s housing data also showed a jump in home construction in Lake County, where massive fires destroyed roughly 1,500 homes over the past two summers. Builders there pulled 242 single-family building permits last year, compared to 69 in 2015.
In Sonoma County, industry and government officials said construction has increased as home prices rebound from the historic crash that accompanied the last recession. The county median home price hit a low of $305,000 in February 2009. But the median price has risen markedly for five years and in March hit a new record high of $639,000.
“We’re into a year-and-a-half rebound,” Keith Woods, chief executive officer at the North Coast Builders Exchange, a Santa Rosa trade group, said of the building sector.
Even so, he cautioned the current level of construction remained well below what would satisfy the current demand for housing.
“It’s a dent,” Woods said, “not a solution.”
In a 20 year-period from 1987 to 2007, local governments issued an annual average of 1,900 building permits for single-family homes in the county. In the subsequent nine years, that average fell to fewer than 370 permits a year.
For builders, “it was kind of a lost decade,” Christopherson said.
Even now, he said, his company takes a conservative approach to building new units. For several years it has included remodeling and flipping homes as part of its business strategy.
Synergy’s biggest project today is the 46-unit Village Walk townhouse and single-family home development on East Cotati Avenue in Cotati. The homes, which range in price from the mid-$400,000s to the low $600,000s, lie a few blocks from that city’s future SMART rail station and within 200 yards of a Starbucks and Oliver’s Market.
“It’s really the epitome of a walkable community,” Christopherson said.
The prolonged decline in building activity in the county contributed to a significant shortage of available housing for both renters and buyers. Demand led to higher prices, which in turn persuaded both builders and lenders of the financial viability of new home construction.